How to find a great house for a good price by asking the right questions (part 1)

by Chris Lang on October 18, 2012

Many guides and articles will tell you what questions to ask when you are buying a house. None of them explain WHY you need to ask those questions – and many reasons are not obvious. So here is a list of questions you should ask before buying a house – and the reasons why you should ask them.

Asking the right questions does a great job of narrowing down your list of houses to inspect. During the first conversation with the real estate agent you can learn if that house is what you’re looking for or not – and then it’s off your list.

Ask: What is the property type (Double brick, Brick-veneer, Weatherboard)?Why: Other than the looks, one of the characteristics of weather-board and brick-veneer houses is that they are not sound proof – some people find that annoying.

Ask: Was the house updated/renovated lately?Why: If it’s an old house (15-20-25 years old) and it wasn’t renovated lately, you’ll probably have to do it yourself, which will cost you extra and take some time. On the other hand, if it was renovated lately then you can just move in and enjoy but the price will be higher for such house.

Ask: How many owners were there?Why: If there were many owners and they changed frequently (every 2-3 years), then chances are the house wasn’t maintained properly. If people had no intention of living in the house for a longer period, they wouldn’t care about keeping it in a good condition.

Ask: Was it rented out? If yes, (A) for how long and (B) how much was the rent?Why:(A) If it was rented out for a long time the chances are you’re in for some renovations and maintenance because normally the tenants don’t do anything about the maintenance of the house and the landlords don’t fix anything that isn’t broken :).

(B)Weekly rent can give you an idea what is the value of that property – annual rent should be 4 to 5 percent of it. So to work out a fair price of that house let’s take the weekly rent (say, $300), multiply it by 52 (weeks in one year) and by 20 (100/5 percent). In this example you will get $312,000 – that would be a good price for such house.

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